ISM and PMI Signal Services Growth, Yet Very Conflicting Jobs Data
After a solid jobs report on Friday and after more good news from the Conference Board on Monday, two more economic barometers are signaling that growth is resuming in the broader economy. Still, there are some mixed readings here.
The PMI Services Index showed that growth in the service sector remains, at 55.0 versus the 55.3 expected by Bloomberg and 55.3 in the prior report. Growth was not seen in employment, which is odd when you consider the Employment Trends Index and the payrolls reports already showing growth. The so-called flash PMI earlier in the month was lower at 54.2, indicating that things picked up later in the month of April.
Institute for Supply Management's Non-Manufacturing Index showed that April's non-manufacturing growth was strong — 55.2 versus the 54.2 expected by Bloomberg. The prior report was only 53.1. Business activity was very strong above 60 and new orders was above 58, but employment's component gave only a reading for 51.2, a drop of more than two points.
The question here is what to make of employment. ADP, TrimTabs and the Bureau of Labor Statistics all indicated higher jobs figures. That included some of the so-called non-manufacturing and services jobs. They are also covering the same month of April.
Maybe the answer for the conflicting reports is that big business additions that make up more of the broader readings are not reflecting some gains in the smaller companies that report on jobs data but that are not part of the larger business groups that make up ISM and PMI.
Filed under: Economy